Bournville leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Bournville tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Bournville you must investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
Lease extensions in Bournville can be a difficult process. We recommend you procure professional help from a lawyer and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Bournville lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months James, came dangerously close to the 80-year mark with the lease on his basement apartment in Bournville. Having bought his home two decades ago, the length of the lease was of minimal interest. Fortunately, it dawned on him that he would imminently be paying an inflated amount for a lease extension. James extended the lease just under the wire in May. James and the freeholder eventually settled on sum of £6,000 . If he failed to meet the deadline, the premium would have escalated by a minimum £950.
Last Winter we were called by Mr and Mrs. C Kelly , who was assigned a lease of a one bedroom apartment in Bournville in September 2011. We are asked if we could estimate the price would likely be to prolong the lease by 90 years. Comparative homes in Bournville with an extended lease were in the region of £290,000. The mid-range amount of ground rent was £60 invoiced annually. The lease lapsed in 2106. Given that there were 80 years unexpired we approximated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of legals.
Last month we were phoned by Mr and Mrs. H Lefèvre , who purchased a garden flat in Bournville in September 2007. We are asked if we could approximate the premium would be for a ninety year lease extension. Identical properties in Bournville with an extended lease were valued about £200,800. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease expiry date was on 25 July 2086. Having 60 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £20,900 and £24,200 exclusive of expenses.